SEMIANNUAL REPORT - USAA REPORT ... 45,497 Alexion Pharmaceuticals, Inc.* $ 5,536 ... 2,397,512 Goldman Sachs Financial Square Government Fund Institutional Class,

SEMIANNUAL REPORTUSAA NASDAQ-100 INDEX FUNDFUND SHARES (USNQX) ■ R6 SHARES (URNQX)

JUNE 30, 2017

Fund Objective 1

Investment Overview 2

Shareholder Voting Results 3

Financial Information

Portfolio of Investments 4

Notes to Portfolio of Investments 11

Financial Statements 12

Notes to Financial Statements 16

Expense Example 32

Advisory Agreement(s) 34

TABLE OF CONTENTS

This report is for the information of the shareholders and others who have received a copy of thecurrently effective prospectus of the Fund, managed by USAA Asset Management Company. It maybe used as sales literature only when preceded or accompanied by a current prospectus, whichprovides further details about the Fund.

©2017, USAA. All rights reserved.

Fund Objective | 1

FUND OBJECTIVE

The USAA Nasdaq-100 Index Fund (the Fund) seeks to match,before fees and expenses, the performance of the stocks composingthe Nasdaq-100 Index. The Nasdaq-100 Index represents 100 of thelargest nonfinancial stocks traded on The Nasdaq Stock Market®.

Types of InvestmentsThe Fund’s principal investment strategy is, under normal market conditions,to invest at least 80% of the Fund’s assets in the common stocks of companiescomposing the Nasdaq-100 Index. This strategy may be changed upon 60 days’written notice to shareholders.In seeking to track the performance of the Nasdaq-100 Index, the Fund’ssubadviser, Northern Trust Investments, Inc. (NTI), will normally invest inall the common stocks of companies in the Nasdaq-100 Index in roughly thesame proportions as their weightings in the index. While NTI attempts toreplicate the index, there may be times when the Fund and the index do notmatch exactly. At times, NTI may purchase a stock not included in theNasdaq-100 Index when it believes doing so would be a cost-efficient way ofapproximating the index’s performance, for example, in anticipation of astock being added to the index. To the extent that the Nasdaq-100 Indexconcentrates in the securities of a particular industry or group of industries,the Fund may similarly concentrate its investments.

IRA DISTRIBUTION WITHHOLDING DISCLOSUREWe generally must withhold federal income tax at a rate of 10% of the taxable portion ofyour distribution and, if you live in a state that requires state income tax withholding, atyour state’s tax rate. However, you may elect not to have withholding apply or to haveincome tax withheld at a higher rate. Any withholding election that you make will applyto any subsequent distribution unless and until you change or revoke the election. If youwish to make a withholding election or change or revoke a prior withholding election,call (800) 531-USAA (8722) or (210) 531-8722.If you do not have a withholding election in place by the date of a distribution, federalincome tax will be withheld from the taxable portion of your distribution at a rateof 10%. If you must pay estimated taxes, you may be subject to estimated tax penaltiesif your estimated tax payments are not sufficient and sufficient tax is not withheldfrom your distribution.For more specific information, please consult your tax adviser.

2 | USAA Nasdaq-100 Index Fund

INVESTMENT OVERVIEW

You will find a complete list of securities that the Fund owns on pages 4-10.

■ TOP 10 EQUITY HOLDINGS – 6/30/17 ■(% of Net Assets)

Apple, Inc. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

11.0%Microsoft Corp.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7.8%

Amazon.com, Inc. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

6.8%Facebook, Inc. “A”

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5.3%

Alphabet, Inc. “C” - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

4.6%Alphabet, Inc. “A”

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4.1%

Comcast Corp. “A” - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

2.7%Intel Corp.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2.3%

Cisco Systems, Inc. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

2.3%Amgen, Inc.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.9%

■ SECTOR ALLOCATION* – 6/30/17 ■

InformationTechnology

54.8%Health Care

10.9%

ConsumerDiscretionary

21.3%

Consumer Staples

5.2%

Industrials

2.2%

TelecommunicationServices

0.9%*Does not include futures, money market instruments, or short-term investments purchased with cashcollateral from securities loaned.Percentages are of the net assets of the Fund, and may not equal 100%.

SHAREHOLDERVOTING RESULTS

Shareholder Voting Results | 3

On March 22, 2017, a meeting of shareholders was held to vote on aproposal relating to the USAA mutual funds. Shareholders of record onJanuary 12, 2017, were entitled to vote on the proposal shown below. Theproposal was approved by the shareholders.

PROPOSAL

Election of new members to the Funds’ Board of Trustees including there-election of Daniel S. McNamara, Robert L. Mason, Ph.D., Paul L.McNamara, Barbara B. Ostdiek, Ph.D., and Michael F. Reimherr.

Number of shares votingTrustees For Votes Withheld

Daniel S. McNamara 9,689,863,032 376,756,871Robert L. Mason, Ph.D. 9,714,117,381 352,502,522Jefferson C. Boyce 9,717,710,105 348,909,798Dawn M. Hawley 9,714,577,808 352,042,095Paul L. McNamara 9,668,206,065 398,413,838Richard Y. Newton III 9,665,513,520 401,106,382Barbara B. Ostdiek, Ph.D. 9,715,801,431 350,818,472Michael F. Reimherr 9,711,558,498 355,061,405


PORTFOLIO OF INVESTMENTSJune 30, 2017 (unaudited)

EQUITY SECURITIES (95.3%)COMMON STOCKS (95.3%)Consumer Discretionary (21.3%)Apparel Retail (0.3%)

79,388 Ross Stores, Inc. $ 4,583

Automobile Manufacturers (0.9%) 33,281 Tesla Motors, Inc.* 12,035

Automotive Retail (0.3%) 18,460 O’Reilly Automotive, Inc.* 4,038

Broadcasting (0.1%) 31,295 Discovery Communications, Inc. “A”* 808 45,417 Discovery Communications, Inc. “C”* 1,145 1,953

Cable & Satellite (5.1%) 54,206 Charter Communications, Inc. “A”* 18,259 959,077 Comcast Corp. “A” 37,327 46,087 DISH Network Corp. “A”* 2,893 48,037 Liberty Global plc “A”* 1,543 123,386 Liberty Global plc “C”* 3,847 9,894 Liberty Global plc LiLAC “A”* 215 24,652 Liberty Global plc LiLAC “C”* 528 945,163 Sirius XM Holdings, Inc.(a) 5,170 69,782

Casinos & Gaming (0.2%) 20,740 Wynn Resorts Ltd. 2,782

General Merchandise Stores (0.3%) 47,944 Dollar Tree, Inc.* 3,352

Hotels, Resorts & Cruise Lines (0.7%) 76,771 Marriott International, Inc. “A” 7,701 46,176 Norwegian Cruise Line Holdings Ltd.* 2,507 10,208

MarketNumber Valueof Shares Security (000)

Portfolio of Investments | 5

Internet & Direct Marketing Retail (10.5%) 96,845 Amazon.com, Inc.*(b) $ 93,746 90,285 Ctrip.com International Ltd. ADR* 4,863 27,992 Expedia, Inc. 4,169 185,834 JD.com, Inc. ADR* 7,288 85,270 Liberty Interactive Corp. “A”* 2,093 16,452 Liberty Ventures* 860 87,328 Netflix, Inc.* 13,048 9,957 Priceline Group, Inc.* 18,625 144,692

Leisure Products (0.3%) 25,323 Hasbro, Inc. 2,824 69,583 Mattel, Inc. 1,498 4,322

Movies & Entertainment (0.9%) 213,199 Twenty-First Century Fox, Inc. “A” 6,042 161,772 Twenty-First Century Fox, Inc. “B” 4,509 71,373 Viacom, Inc. “B” 2,396 12,947

Restaurants (1.3%) 293,406 Starbucks Corp. 17,108

Specialty Stores (0.4%) 26,039 Tractor Supply Co. 1,412 12,589 Ulta Beauty, Inc.* 3,617 5,029 Total Consumer Discretionary 292,831

Consumer Staples (5.2%)Drug Retail (1.3%)

219,017 Walgreens Boots Alliance, Inc. 17,151

Hypermarkets & Super Centers (1.0%) 88,939 Costco Wholesale Corp. 14,224

Packaged Foods & Meat (2.5%) 246,721 Kraft Heinz Co. 21,129 307,315 Mondelez International, Inc. “A” 13,273 34,402

Soft Drinks (0.4%) 115,023 Monster Beverage Corp.* 5,715 Total Consumer Staples 71,492


Health Care (10.9%)Biotechnology (8.0%)

45,497 Alexion Pharmaceuticals, Inc.* $ 5,536 149,004 Amgen, Inc. 25,663 42,978 Biogen, Inc.* 11,662 35,354 BioMarin Pharmaceutical, Inc.* 3,211 158,210 Celgene Corp.* 20,547 264,762 Gilead Sciences, Inc. 18,740 41,490 Incyte Corp.* 5,224 21,149 Regeneron Pharmaceuticals, Inc.* 10,387 15,870 Shire plc ADR 2,623 50,465 Vertex Pharmaceuticals, Inc.* 6,503 110,096

Health Care Distributors (0.2%) 16,075 Henry Schein, Inc.* 2,942

Health Care Equipment (0.9%) 56,742 Hologic, Inc.* 2,575 17,856 IDEXX Laboratories, Inc.* 2,882 7,465 Intuitive Surgical, Inc.* 6,983 12,440

Health Care Services (0.6%) 120,256 Express Scripts Holding Co.* 7,677

Health Care Supplies (0.2%) 46,394 Dentsply Sirona, Inc. 3,008

Health Care Technology (0.3%) 66,951 Cerner Corp.* 4,450

Life Sciences Tools & Services (0.4%) 29,582 Illumina, Inc.* 5,133

Pharmaceuticals (0.3%) 108,592 Mylan N.V.* 4,216 Total Health Care 149,962

Industrials (2.2%)Airlines (0.4%)

99,805 American Airlines Group, Inc. 5,022

Construction Machinery & Heavy Trucks (0.3%) 71,167 PACCAR, Inc. 4,700

Diversified Support Services (0.2%) 21,341 Cintas Corp. 2,690




Railroads (0.7%) 186,935 CSX Corp. $ 10,199

Research & Consulting Services (0.2%) 33,508 Verisk Analytics, Inc.* 2,827

Trading Companies & Distributors (0.2%) 58,601 Fastenal Co. 2,551

Trucking (0.2%) 22,282 JB Hunt Transport Services, Inc. 2,036 Total Industrials 30,025

Information Technology (54.8%)Application Software (2.0%)

100,235 Adobe Systems, Inc.* 14,177 44,654 Autodesk, Inc.* 4,502 30,623 Citrix Systems, Inc.* 2,437 51,914 Intuit, Inc. 6,895 28,011

Communications Equipment (2.3%) 1,013,067 Cisco Systems, Inc. 31,709

Data Processing & Outsourced Services (2.3%) 90,651 Automatic Data Processing, Inc. 9,288 43,033 Fiserv, Inc.* 5,265 72,789 Paychex, Inc. 4,145 243,456 PayPal Holdings, Inc.* 13,066 31,764

Home Entertainment Software (1.1%) 152,702 Activision Blizzard, Inc. 8,791 62,816 Electronic Arts, Inc.* 6,641 15,432

Internet Software & Services (15.9%) 35,025 Akamai Technologies, Inc.* 1,744 60,304 Alphabet, Inc. “A”*(b) 56,063 70,301 Alphabet, Inc. “C”* 63,885 55,959 Baidu, Inc. ADR* 10,009 219,299 eBay, Inc.* 7,658 479,141 Facebook, Inc. “A”* 72,341 8,947 MercadoLibre, Inc. 2,245 15,444 NetEase, Inc. ADR 4,643 218,588


IT Consulting & Other Services (0.6%) 119,338 Cognizant Technology Solutions Corp. “A” $ 7,924

Semiconductor Equipment (1.2%) 217,773 Applied Materials, Inc. 8,996 31,756 KLA-Tencor Corp. 2,906 32,682 Lam Research Corp. 4,622 16,524

Semiconductors (9.2%) 74,357 Analog Devices, Inc. 5,785 81,320 Broadcom Ltd. 18,952 954,101 Intel Corp. 32,191 57,243 Maxim Integrated Products, Inc. 2,570 46,474 Microchip Technology, Inc. 3,587 224,152 Micron Technology, Inc.* 6,693 120,555 NVIDIA Corp. 17,428 299,347 QUALCOMM, Inc.(b) 16,530 37,386 Skyworks Solutions, Inc. 3,587 201,856 Texas Instruments, Inc. 15,529 50,310 Xilinx, Inc. 3,236 126,088

Systems Software (8.6%) 84,650 CA, Inc. 2,918 33,630 Check Point Software Technologies Ltd.* 3,668 1,564,295 Microsoft Corp.(b) 107,827 123,229 Symantec Corp. 3,481 117,894

Technology Hardware, Storage, & Peripherals (11.6%) 1,056,399 Apple, Inc.(b) 152,142 60,099 Seagate Technology plc 2,329 59,007 Western Digital Corp. 5,228 159,699 Total Information Technology 753,633

Telecommunication Services (0.9%)Wireless Telecommunication Services (0.9%)

168,339 T-Mobile US, Inc.* 10,204 88,197 Vodafone Group plc ADR 2,534 12,738 Total Telecommunication Services 12,738 Total Common Stocks 1,310,681 Total Equity Securities (cost: $766,011) 1,310,681




MONEY MARKET INSTRUMENTS (4.6%)GOVERNMENT & U.S. TREASURY MONEY MARKET FUNDS (4.4%)

61,358,031 State Street Institutional Treasury Money Market Fund Premier Class, 0.83%(c) $ 61,358

PrincipalAmount$(000)

U.S. TREASURY BILLS (0.2%)$ 2,660 0.77%; 8/17/2017(d) 2,657 Total Money Market Instruments (cost: $64,015) 64,015

Numberof Shares

SHORT-TERM INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED (0.4%)GOVERNMENT & U.S. TREASURY MONEY MARKET FUNDS (0.4%)

29,521 Federated Government Obligations Fund Institutional Class, 0.82%(c) 30 2,397,512 Goldman Sachs Financial Square Government Fund Institutional Class, 0.86%(c) 2,397 948,176 Invesco Government & Agency Portfolio Institutional Class, 0.89%(c) 948 89,825 Morgan Stanley Institutional Liquidity Funds Government Portfolio Institutional Class, 0.84%(c) 90 1,681,135 Western Asset Institutional Government Reserves Institutional Class, 0.82%(c) 1,681 Total Short-Term Investments Purchased with Cash Collateral from Securities Loaned (cost: $5,146) 5,146

Total Investments (cost: $835,172) $1,379,842

UnrealizedNumber of Contract Appreciation/Contracts Expiration Value (Depreciation)Long/(Short) Date (000) (000)

FUTURES(e)

LONG FUTURESEquity Contracts

570 Nasdaq 100 E-Mini 9/15/2017 $64,441 $(2,337) Total Futures $64,441 $(2,337)


($ in 000s) VALUATION HIERARCHY

Assets LEVEL 1 LEVEL 2 LEVEL 3 Total

Equity Securities:Common Stocks $1,310,681 $ – $– $1,310,681

Money Market Instruments:Government & U.S. Treasury

Money Market Funds 61,358 – – 61,358U.S. Treasury Bills – 2,657 – 2,657

Short-Term Investments Purchased with Cash Collateral from Securities Loaned: 5,146 – – 5,146

Total $1,377,185 $2,657 $– $1,379,842

Liabilities LEVEL 1 LEVEL 2 LEVEL 3 TotalFutures(1) $(2,337) $– $– $(2,337)

Total $(2,337) $– $– $(2,337)

(1)Futures are valued at the unrealized appreciation/depreciation on the investment.

Refer to the Portfolio of Investments for additional industry, country, or geographic region classifications.

For the period of January 1, 2017, through June 30, 2017, there were no transfers of securities betweenlevels. The Fund’s policy is to recognize any transfers in and transfers out as of the beginning of thereporting period in which the event or circumstance that caused the transfer occurred.


Notes to Portfolio of Investments | 11

NOTES TO PORTFOLIOOF INVESTMENTSJune 30, 2017 (unaudited)

■ GENERAL NOTES

Market values of securities are determined by procedures and practicesdiscussed in Note 1A to the financial statements.

The Portfolio of Investments category percentages shown represent thepercentages of the investments to net assets, and, in total, may not equal100%. A category percentage of 0.0% represents less than 0.1% of netassets.

■ PORTFOLIO ABBREVIATIONS AND DESCRIPTIONS

ADR American depositary receipts are receipts issued by a U.S. bankevidencing ownership of foreign shares. Dividends are paid in U.S.dollars.

■ SPECIFIC NOTES

(a) The security, or a portion thereof, was out on loan as of June 30,2017.

(b) The security, or a portion thereof, is segregated to cover the value ofopen futures contracts at June 30, 2017.

(c) Rate represents the money market fund annualized seven-day yield atJune 30, 2017.

(d) Securities with a value of $2,657,000 are segregated as collateral forinitial margin requirements on open futures contracts.

(e) The contract value of futures purchased and/or sold as a percentageof net assets is 4.7%.

* Non-income-producing security.See accompanying notes to financial statements.


STATEMENT OF ASSETS AND LIABILITIES(IN THOUSANDS)

June 30, 2017 (unaudited)

ASSETSInvestments in securities, at market value (including securities on

loan of $5,118) (cost of $835,172) $1,379,842Receivables: Capital shares sold 1,429 USAA Asset Management Company (Note 7D) 6 Dividends and interest 483 Other 15

Total assets 1,381,775

LIABILITIESPayables: Upon return of securities loaned 5,146 Capital shares redeemed 561Variation margin on futures contracts 4Accrued management fees 231Accrued transfer agent’s f ees 62Other accrued expenses and payables 51

Total liabilities 6,055

Net assets applicable to capital shares outstanding $1,375,720

NET ASSETS CONSIST OF:Paid-in capital $ 804,827Accumulated undistributed net investment income 12,177Accumulated net realized gain on investments and futures transactions 16,383Net unrealized appreciation of investments and futures contracts 542,333

Net assets applicable to capital shares outstanding $1,375,720

Net asset value, redemption price, and offering price per share: Fund Shares (net assets of $1,370,472/85,318 capital shares

outstanding, no par value) $ 16.06

R6 Shares (net assets of $5,248/327 capital shares outstanding, no par value) $ 16.07

See accompanying notes to financial statements.

Financial Statements | 13

STATEMENT OF OPERATIONS(IN THOUSANDS)

Six-month period ended June 30, 2017 (unaudited)

INVESTMENT INCOMEDividends $ 7,745Interest (net of foreign taxes withheld of $3) 117Securities lending (net) 52

Total income 7,914

EXPENSESManagement fees 1,242Administration and servicing fees: Fund Shares 929 R6 Shares* 1Transfer agent’s f ees: Fund Shares 661Custody and accounting fees: Fund Shares 79Postage: Fund Shares 69Shareholder reporting fees: Fund Shares 16Trustees’ fees 16Registration fees: Fund Shares 32 R6 Shares* 9Professional f ees 64

Other 123

Total expenses 3,241Expenses reimbursed: R6 Shares* (7)

Net expenses 3,234

NET INVESTMENT INCOME 4,680

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS

Net realized gain on: Investments $ 15,967 Futures transactions 6,181Change in net unrealized appreciation/(depreciation) of: Investments 155,247 Futures contracts (2,258)

Net realized and unrealized gain 175,137

Increase in net assets resulting from operations $179,817

*R6 Shares commenced operations on March 1, 2017.



STATEMENTS OF CHANGES IN NET ASSETS(IN THOUSANDS)

Six-month period ended June 30, 2017 (unaudited), and year ended December 31, 2016

Financial Statements | 15

6/30/2017 12/31/2016

FROM OPERATIONSNet investment income $ 4,680 $ 7,497Net realized gain (loss) on investments 15,967 (41)Net realized gain on futures transactions 6,181 2,045Change in net unrealized appreciation/(depreciation) of: Investments 155,247 58,262 Futures contracts (2,258) 137 Increase in net assets resulting from operations 179,817 67,900

DISTRIBUTIONS TO SHAREHOLDERS FROM:Net investment income: Fund Shares – (5,335) R6 Shares* – – Distributions to shareholders – (5,335)

NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS (NOTE 6)

Fund Shares 112,584 80,749R6 Shares* 5,000 – Total net increase in net assets from capital share transactions 117,584 80,749Capital contribution from USAA Transfer Agency Company:

Fund Shares – 1Net increase in net assets 297,401 143,315

NET ASSETSBeginning of period 1,078,319 935,004End of period $1,375,720 $1,078,319

Accumulated undistributed net investment income:End of period $ 12,177 $ 7,497

*R6 Shares commenced operations on March 1, 2017.



NOTES TO FINANCIAL STATEMENTSJune 30, 2017 (unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESUSAA MUTUAL FUNDS TRUST (the Trust), registered under theInvestment Company Act of 1940, as amended (the 1940 Act), is an open-endmanagement investment company organized as a Delaware statutory trustconsisting of 54 separate funds. Effective July 26, 2017, the USAA CaliforniaMoney Market Fund, USAA New York Money Market Fund, and theUSAA Virginia Money Market Fund were liquidated. Additionally, theUSAA Nasdaq-100 Index Fund (the Fund) qualifies as a registeredinvestment company under Accounting Standards Codification Topic 946.The information presented in this semiannual report pertains only to theFund, which is classified as nondiversified under the 1940 Act. The Fundseeks to match, before fees and expenses, the performance of the stockscomposing the Nasdaq-100 Index. The Nasdaq-100 Index represents 100 ofthe largest nonfinancial stocks traded on The Nasdaq Stock Market. USAAAsset Management Company (the Manager), an affiliate of the Fund, hasretained Northern Trust Investments, Inc. (NTI) to serve as subadviser forthe Fund. NTI is responsible for investing the Fund’s assets. Under normalmarket conditions, NTI attempts to achieve the Fund’s objective by investingat least 80% of the Fund’s assets in the common stocks of companiescomposing the Nasdaq-100 Index.

As a nondiversified fund, the Fund may invest a greater percentage of itsassets in a single issuer. Because a relatively high percentage of the Fund’stotal assets may be invested in the securities of a single issuer or a limitednumber of issuers, the securities of the Fund may be more sensitive to changesin the market value of a single issuer, a limited number of issuers, or largecompanies generally. Such a focused investment strategy may increase thevolatility of the Fund’s investment results because this Fund may be moresusceptible to risk associated with a single economic, political, or regulatoryevent than a diversified fund.

The Fund consists of two classes of shares: Nasdaq-100 Index Fund Shares(Fund Shares) and effective March 1, 2017, a new share class designatedNasdaq-100 Index Fund R6 Shares (R6 Shares). Each class of shares has equalrights to assets and earnings, except that each class bears certain class-relatedexpenses specific to the particular class. These expenses include administrationand servicing fees, transfer agent fees, postage, shareholder reporting fees, andcertain registration and custodian fees. Expenses not attributable to a specificclass, income, and realized gains or losses on investments are allocated to eachclass of shares based on each class’ relative net assets. Each class has exclusivevoting rights on matters related solely to that class and separate voting rights onmatters that relate to both classes. The R6 Shares are available for investment byparticipants in employer-sponsored retirement plans where a financialintermediary provides retirement recordkeeping services to plan participantsand to endowment funds and foundations.

A. Security valuation – The Trust’s Board of Trustees (the Board) hasestablished the Valuation Committee (the Committee), and subject toBoard oversight, the Committee administers and oversees the Fund’svaluation policies and procedures which are approved by the Board.Among other things, these policies and procedures allow the Fund toutilize independent pricing services, quotations from securities dealers,and a wide variety of sources and information to establish and adjust thefair value of securities as events occur and circumstances warrant.

The Committee reports to the Board on a quarterly basis and makesrecommendations to the Board as to pricing methodologies and servicesused by the Fund and presents additional information to the Boardregarding application of the pricing and fair valuation policies andprocedures during the preceding quarter.

The Committee meets as often as necessary to make pricing and fairvalue determinations. In addition, the Committee holds regular monthlymeetings to review prior actions taken by the Committee and the Manager.Among other things, these monthly meetings include a review andanalysis of back testing reports, pricing service quotation comparisons,illiquid securities and fair value determinations, pricing movements, anddaily stale price monitoring.

Notes to Financial Statements | 17

The value of each security is determined (as of the close of trading onthe New York Stock Exchange (NYSE) on each business day the NYSEis open) as set forth below:

1. Equity securities, including exchange-traded funds (ETFs), except asotherwise noted, traded primarily on a domestic securities exchangeor the over-the-counter markets, are valued at the last sales price orofficial closing price on the exchange or primary market on whichthey trade. Securities traded primarily on foreign securitiesexchanges or markets are valued at the last quoted sales price, or themost recently determined official closing price calculated accordingto local market convention, available at the time the Fund is valued.If no last sale or official closing price is reported or available, theaverage of the bid and asked prices generally is used. Actively tradedequity securities listed on a domestic exchange generally arecategorized in Level 1 of the fair value hierarchy. Certain preferredand equity securities traded in inactive markets generally arecategorized in Level 2 of the fair value hierarchy.

2. Short-term debt securities with original or remaining maturities of60 days or less may be valued at amortized cost, provided thatamortized cost represents the fair value of such securities.

3. Debt securities with maturities greater than 60 days are valued eachbusiness day by a pricing service (the Service) approved by theBoard. The Service uses an evaluated mean between quoted bid andasked prices or the last sales price to value a security when, in theService’s judgment, these prices are readily available and arerepresentative of the security’s market value. For many securities,such prices are not readily available. The Service generally pricesthose securities based on methods which include consideration ofyields or prices of securities of comparable quality, coupon,maturity, and type; indications as to values from dealers in securities;and general market conditions. Generally, debt securities arecategorized in Level 2 of the fair value hierarchy; however, to theextent the valuations include significant unobservable inputs, thesecurities would be categorized in Level 3.


4. Repurchase agreements are valued at cost.

5. Investments in open-end investment companies, commingled, orother funds, other than ETFs, are valued at their net asset value(NAV) at the end of each business day and are categorized in Level 1of the fair value hierarchy.

6. Futures are valued at the settlement price at the close of market onthe principal exchange on which they are traded or, in the absence ofany transactions that day, the settlement price on the prior tradingdate if it is within the spread between the closing bid and askedprices closest to the last reported sale price.

7. In the event that price quotations or valuations are not readilyavailable, are not reflective of market value, or a significant event hasbeen recognized in relation to a security or class of securities, thesecurities are valued in good faith by the Committee in accordancewith valuation procedures approved by the Board. The effect of fairvalue pricing is that securities may not be priced on the basis ofquotations from the primary market in which they are traded andthe actual price realized from the sale of a security may differmaterially from the fair value price. Valuing these securities at fairvalue is intended to cause the Fund’s NAV to be more reliable than itotherwise would be.

Fair value methods used by the Manager include, but are not limitedto, obtaining market quotations from secondary pricing services,broker-dealers, other pricing services, or widely used quotationsystems. General factors considered in determining the fair value ofsecurities include fundamental analytical data, the nature andduration of any restrictions on disposition of the securities,evaluation of credit quality, and an evaluation of the forces thatinfluenced the market in which the securities are purchased and sold.

B. Fair value measurements – Fair value is defined as the price that would bereceived to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. Thethree-level valuation hierarchy disclosed in the Portfolio of Investments


is based upon the transparency of inputs to the valuation of an asset orliability as of the measurement date. The three levels are defined asfollows:

Level 1 – inputs to the valuation methodology are quoted prices(unadjusted) in active markets for identical securities.

Level 2 – inputs to the valuation methodology are other significantobservable inputs, including quoted prices for similar securities, inputsthat are observable for the securities, either directly or indirectly, andmarket-corroborated inputs such as market indexes.

Level 3 – inputs to the valuation methodology are unobservable andsignificant to the fair value measurement, including the Manager’s ownassumptions in determining the fair value.

The inputs or methodologies used for valuing securities are notnecessarily an indication of the risks associated with investing in thosesecurities.

C. Derivative instruments and hedging activities – The Fund may buy, sell,and enter into certain types of derivatives, including, but not limited tofutures contracts, options, and options on futures contracts, undercircumstances in which such instruments are expected by the portfoliomanager to aid in achieving the Fund’s investment objective. The Fundalso may use derivatives in circumstances where the portfolio managerbelieves they offer an economical means of gaining exposure to aparticular asset class or securities market or to keep cash on hand tomeet shareholder redemptions or other needs while maintainingexposure to the market. With exchange-listed futures contracts andoptions, counterparty credit risk to the Fund is limited to the exchange’sclearinghouse which, as counterparty to all exchange-traded futurescontracts and options, guarantees the transactions against default fromthe actual counterparty to the transaction. The Fund’s derivativeagreements held at June 30, 2017, did not include master nettingprovisions.


Futures contracts – The Fund is subject to cash flow and tracking errorrisk in the normal course of pursuing its investment objectives. TheFund may use stock index futures contracts in an attempt to reduce anyperformance discrepancies between the Fund and the Nasdaq-100 Index.A futures contract represents a commitment for the future purchase orsale of an asset at a specified price on a specified date. Upon enteringinto such contracts, the Fund is required to deposit with the broker ineither cash or securities an initial margin in an amount equal to a certainpercentage of the contract amount. Subsequent payments (variationmargin) are made or received by the Fund each day, depending on thedaily fluctuations in the value of the contract, and are recorded forfinancial statement purposes as unrealized gains or losses. When thecontract is closed, the Fund records a realized gain or loss equal to thedifference between the value of the contract at the time it was openedand the value at the time it was closed. Upon entering into suchcontracts, the Fund bears the risk of interest or exchange rates orsecurities prices moving unexpectedly in an unfavorable direction, inwhich case, the Fund may not achieve the anticipated benefits of thefutures contracts.

Fair Values of Derivative Instruments as of June 30, 2017*(in thousands) Asset Derivatives Liability Derivatives Statement of Statement of Derivatives not Assets and Assets and accounted for as Liabilities Liabilities hedging instruments Location Fair Value Location Fair ValueEquity contracts – $– Net unrealized $2,337** appreciation of investments and futures contracts

*For open derivative instruments as of June 30, 2017, see the Portfolio of Investments, which alsois indicative of activity for the six-month period ended June 30, 2017.

**Includes cumulative appreciation/(depreciation) of futures as reported on the Portfolio ofInvestments. Only current day’s variation margin is reported within the Statement of Assets andLiabilities.


The Effect of Derivative Instruments on the Statement of Operationsfor the six-month period ended June 30, 2017 (in thousands) Change in unrealized Derivatives not Realized appreciation/ accounted for as Statement of gain (loss) (depreciation) hedging instruments Operations Location on derivatives on derivativesEquity contracts Net realized gain (loss) $6,181 $(2,258) on Futures transactions / Change in net unrealized appreciation/(depreciation) of Futures contracts

D. Federal taxes – The Fund’s policy is to comply with the requirements ofthe Internal Revenue Code of 1986, as amended, applicable to regulatedinvestment companies and to distribute substantially all of its taxableincome and net capital gains, if any, to its shareholders. Therefore, nofederal income tax provision is required.

E. Foreign taxation – Foreign income and capital gains on some foreignsecurities may be subject to foreign taxes, which are reflected as areduction to such income and realized gains. The Fund records a liabilitybased on unrealized gains to provide for potential foreign taxes payableupon the sale of these securities. Foreign taxes have been provided for inaccordance with the Fund’s understanding of the applicable countries’prevailing tax rules and rates.

F. Investments in securities – Securities transactions are accounted for on thedate the securities are purchased or sold (trade date). Gains or losses fromsales of investment securities are computed on the identified cost basis.Dividend income, less foreign taxes, if any, is recorded on the ex-dividenddate. If the ex-dividend date has passed, certain dividends from foreignsecurities are recorded upon notification. Interest income is recordeddaily on the accrual basis. Premiums and discounts on short-termsecurities are amortized on a straight-line basis over the life of therespective securities.

G. Expenses paid indirectly – Through arrangements with the Fund’scustodian and other banks utilized by the Fund for cash managementpurposes, realized credits, if any, generated from cash balances in the


Fund’s bank accounts may be used to directly reduce the Fund’sexpenses. For the six-month period ended June 30, 2017, there were nocustodian and other bank credits.

H. Indemnifications – Under the Trust’s organizational documents, itsofficers and trustees are indemnified against certain liabilities arising outof the performance of their duties to the Trust. In addition, in thenormal course of business, the Trust enters into contracts that contain avariety of representations and warranties that provide generalindemnifications. The Trust’s maximum exposure under thesearrangements is unknown, as this would involve future claims that maybe made against the Trust that have not yet occurred. However, the Trustexpects the risk of loss to be remote.

I. Use of estimates – The preparation of financial statements in conformitywith U.S. generally accepted accounting principles requires managementto make estimates and assumptions that may affect the reported amountsin the financial statements.

(2) LINE OF CREDITThe Fund participates, along with other funds of the Trust, in a joint,short-term, revolving, committed loan agreement of $500 million withUSAA Capital Corporation (CAPCO), an affiliate of the Manager. Thepurpose of the agreement is to provide temporary or emergency cash needs,including redemption requests that might otherwise require the untimelydisposition of securities. Subject to availability (including usage of thefacility by other funds of the Trust), the Fund may borrow from CAPCOan amount up to 5% of the Fund’s total assets at an interest rate based onthe London Interbank Offered Rate (LIBOR), plus 100.0 basis points.

The Funds are also assessed facility fees by CAPCO in the amount of 12.0basis points of the amount of the committed loan agreement. Prior toSeptember 30, 2016, the maximum annual facility fee was 9.0 basis points ofthe amount of the committed loan agreement. The facility fees are allocatedamong the Funds based on their respective average net assets for the period.

The Funds may request an optional increase of the committed loanagreement from $500 million up to $750 million. If the Funds increase the


committed loan agreement, the assessed facility fee on the amount of theadditional commitment will be 13.0 basis points.

For the six-month period ended June 30, 2017, the Fund paid CAPCOfacility fees of $5,000, which represents 1.7% of the total fees paid toCAPCO by the Funds. The Fund had no borrowings under this agreementduring the six-month period ended June 30, 2017.

(3) DISTRIBUTIONSThe tax basis of distributions and accumulated undistributed net investmentincome will be determined as of the Fund’s tax year-end of December 31,2017, in accordance with applicable federal tax law.

Distributions of net investment income and realized gains from securitytransactions not offset by capital losses are made annually in the succeedingfiscal year or as otherwise required to avoid the payment of federal income tax.

At December 31, 2016, the Fund had no capital loss carryforwards, forfederal income tax purposes.

For the six-month period ended June 30, 2017, the Fund did not incur anyincome tax, interest, or penalties, and has recorded no liability for netunrecognized tax benefits relating to uncertain income tax positions. On anongoing basis, the Manager will monitor the Fund’s tax basis to determine ifadjustments to this conclusion are necessary. The statute of limitations onthe Fund’s tax return filings generally remain open for the three precedingfiscal reporting year ends and remain subject to examination by the InternalRevenue Service and state taxing authorities.

(4) INVESTMENT TRANSACTIONSCost of purchases and proceeds from sales/maturities of securities, excludingshort-term securities, for the six-month period ended June 30, 2017, were$119,383,000 and $41,290,000, respectively.

As of June 30, 2017, the cost of securities, including short-term securities, forfederal income tax purposes, was approximately the same as the costreported in the financial statements.


Gross unrealized appreciation and depreciation of investments as of June 30,2017, were $555,911,000 and $11,241,000, respectively, resulting in netunrealized appreciation of $544,670,000.

(5) SECURITIES LENDINGThe Fund, through its securities lending agreement with Citibank, N.A.(Citibank), may lend its securities to qualified financial institutions, such ascertain broker-dealers, to earn additional income. The borrowers are requiredto secure their loans continuously with collateral in an amount at least equalto 102% of the fair value of domestic securities and foreign governmentsecurities loaned and 105% of the fair value of foreign securities and allother securities loaned. Collateral may be cash, U.S. government securities,or other securities as permitted by SEC guidelines. Cash collateral is investedin high-quality short-term investments. Collateral requirements aredetermined daily based on the prior business day’s ending value of securitiesloaned. Risks to the Fund in securities-lending transactions are that theborrower may not provide additional collateral when required or return thesecurities when due, and that the value of the short-term investments will beless than the amount of cash collateral required to be returned to theborrower. The Fund’s agreement with Citibank does not include masternetting provisions. Non-cash collateral received by the Fund may not be soldor re-pledged except to satisfy borrower default. Cash collateral is listed inthe Fund’s Portfolio of Investments and Financial Statements while non-cashcollateral is not included. For the six-month period ended June 30, 2017, theFund received securities-lending income of $52,000, which is net of the 10%of income retained by Citibank. As of June 30, 2017, the Fund loanedsecurities having a fair market value of approximately $5,118,000, and thevalue of the cash collateral received was $5,146,000.

(6) CAPITAL SHARE TRANSACTIONSAt June 30, 2017, there were an unlimited number of shares of capital stockat no par value authorized for the Fund.


Capital share transactions for all classes were as follows, in thousands: Six-Month Period Ended Year Ended June 30, 2017 December 31, 2016

Shares Amount Shares AmountFund Shares:Shares sold 18,080 $ 279,525 23,911 $ 308,078Shares issued from

reinvested dividends – – 377 5,261Shares redeemed (10,947) (166,941) (18,088) (232,590)Net increase from capital

share transactions 7,133 $ 112,584 6,200 $ 80,749

R6 Shares (commenced on March 1, 2017):Shares sold 327 $ 5,000 – $ –Shares issued from

reinvested dividends – – – –Shares redeemed – – – –Net increase from capital

share transactions 327 $ 5,000 – $ –

(7) TRANSACTIONS WITH MANAGER

A. Management fees – The Manager provides investment managementservices to the Fund pursuant to an Advisory Agreement. Under thisagreement, the Manager is responsible for managing the business andaffairs of the Fund. The Manager also is authorized to select (withapproval of the Board and without shareholder approval) one or moresubadvisers to manage the day-to-day investment of a portion of theFund’s assets.

The Manager monitors each subadviser’s performance throughquantitative and qualitative analysis and periodically reports to theBoard as to whether each subadviser’s agreement should be renewed,terminated, or modified. The Manager is also responsible for determiningthe asset allocation for the subadviser(s). The allocation for each subadvisercould range from 0% to 100% of the Fund’s assets, and the Managercould change the allocations without shareholder approval.


The Fund’s management fees are accrued daily and paid monthly at anannualized rate of 0.20% of the Fund’s average net assets. For the six-month period ended June 30, 2017, the Fund incurred management fees,paid or payable to the Manager, of $1,242,000.

B. Subadvisory arrangement(s) – The Manager entered into an InvestmentSubadvisory Agreement with NTI under which NTI directs theinvestment and reinvestment of the Fund’s assets (as allocated from timeto time by the Manager).

The Manager (not the Fund) pays NTI a subadvisory fee equal to thegreater of a minimum annual fee of $50,000 or a fee at an annual rate equalto 0.06% of the Fund’s average net assets on amounts up to $100 million;0.04% of net assets for amounts over $100 million and up to $250 million;and 0.03% of net assets for amounts over $250 million. For the six-monthperiod ended June 30, 2017, the Manager incurred subadvisory fees withrespect to the Fund, paid or payable to NTI, of $209,000.

C. Administration and servicing fees – The Manager provides certainadministration and servicing functions for the Fund. For such services,the Manager receives a fee accrued daily and paid monthly at anannualized rate of 0.15% of average net assets of the Fund Shares and0.05% of average net assets of the R6 Shares. For the six-month periodended June 30, 2017 (and for the period from March 1, 2017, to June 30,2017, for the R6 Shares), the Fund Shares and R6 Shares incurredadministration and servicing fees, paid or payable to the Manager, of$929,000 and $1,000, respectively.

In addition to the services provided under its Administration andServicing Agreement with the Fund, the Manager also provides certaincompliance and legal services for the benefit of the Fund. The Board hasapproved the reimbursement of a portion of these expenses incurred bythe Manager. For the six-month period ended June 30, 2017, the Fundreimbursed the Manager $16,000 for these compliance and legal services.These expenses are included in the professional fees on the Fund’sStatement of Operations.


D. Expense limitation – The Manager agreed, through April 30, 2018, tolimit the total annual operating expenses of the R6 Shares to 0.40% of itsaverage annual net assets, excluding extraordinary expenses and beforereductions of any expenses paid indirectly, and would reimburse theFund for all expenses in excess of that amount. This expense limitationarrangement may not be changed or terminated through April 30, 2018,without approval of the Board, and may be changed or terminated bythe Manager at any time after that date. For the period from March 1,2017, to June 30, 2017, the Fund incurred reimbursable expenses fromthe Manager for the R6 Shares of $7,000, of which $6,000 was receivablefrom the Manager.

E. Transfer agent’s fees – USAA Transfer Agency Company, d/b/a USAAShareholder Account Services (SAS), an affiliate of the Manager,provides transfer agent services to the Fund Shares based on an annualcharge of $23 per shareholder account plus out-of-pocket expenses. SASpays a portion of these fees to certain intermediaries for theadministration and servicing of accounts that are held with suchintermediaries. Transfer agent’s fees for R6 Shares are paid monthlybased on a fee accrued daily at an annualized rate of 0.01% of the R6Shares’ average net assets, plus out-of-pocket expenses. For the six-month period ended June 30, 2017 (and for the period from March 1,2017, to June 30, 2017, for the R6 Shares), the Fund Shares and R6Shares incurred transfer agent’s fees, paid or payable to SAS, of $661,000and less than $500, respectively.

F. Underwriting services – USAA Investment Management Companyprovides exclusive underwriting and distribution of the Fund’s shares ona continuing best-efforts basis and receives no fee or other compensationfor these services.

(8) TRANSACTIONS WITH AFFILIATESThe Manager is indirectly wholly owned by United Services AutomobileAssociation (USAA), a large, diversified financial services institution. AtJune 30, 2017, USAA and its affiliates owned 327,000 R6 Shares, whichrepresents 100% of the R6 Shares outstanding and 0.4% of the Fund’s totaloutstanding shares.


Certain trustees and officers of the Fund are also directors, officers, and/oremployees of the Manager. None of the affiliated trustees or Fund officersreceived any compensation from the Fund.

(9) UPCOMING REGULATORY MATTERSIn October 2016, the U.S. Securities and Exchange Commission (SEC) issuedFinal Rule Release No. 33-10231, Investment Company ReportingModernization. In part, the rules require the filing of new forms N-PORTand N-CEN, and amend Regulation S-X to require standardized, enhanceddisclosure about derivatives in investment company financial statements, aswell as other amendments.

In October 2016, the SEC issued Final Rule Release No. 33-10233, InvestmentCompany Liquidity Risk Management Programs. This rule requires funds toestablish a liquidity risk management program and enhances disclosuresregarding funds’ liquidity.

In October 2016, the SEC issued Final Rule Release No. 33-10234, InvestmentCompany Swing Pricing. This rule permits certain funds to use swing pricingduring periods of heavy redemptions and requires certain disclosures regardingthe use of swing pricing in forms filed with the SEC.

The Manager continues to evaluate the impact these rules will have on thefinancial statements and other disclosures. The compliance date for newforms N-PORT and N-CEN is June 1, 2018, with other staggered compliancedates extending through December 2018. The Fund is expected to complywith the June 1, 2018, new forms N-PORT and N-CEN compliance date.



(10) FINANCIAL HIGHLIGHTS – FUND SHARESPer share operating performance for a share outstanding throughout eachperiod is as follows: Six-Month Period Ended June 30, Year Ended December 31, 2017 2016 2015 2014 2013 2012Net asset value at

beginning of period $ 13.79 $ 12.99 $ 12.23 $ 10.32 $ 7.61 $ 6.54 Income from investment

operations: Net investment income .05 .09 .08(a) .09 .06 .05 Net realized and

unrealized gain 2.22 .78 1.04(a) 1.85 2.68 1.09 Total from investment

operations 2.27 .87 1.12(a) 1.94 2.74 1.14 Less distributions from: Net investment income – (.07) (.08) (.03) (.03) (.06) Realized capital gains – – (.28) – – (.01) Total distributions – (.07) (.36) (.03) (.03) (.07) Net asset value at

end of period $ 16.06 $ 13.79 $ 12.99 $ 12.23 $ 10.32 $ 7.61 Total return (%)* 16.46 6.68 9.09 18.75 36.00 17.46Net assets at

end of period (000) $1,370,472 $1,078,319 $935,004 $706,604 $460,689 $309,634Ratios to average

net assets:** Expenses (%)(b) .52(d) .53 .57 .59 .64(c) .71 Expenses, excluding

reimbursements (%)(b) .52(d) .53 .57 .59 .64 .75 Net investment income (%) .75(d) .77 .62 1.04 .77 .80Portfolio turnover (%) 3 4 10 6 11 10

* Assumes reinvestment of all net investment income and realized capital gain distributions, if any,during the period. Includes adjustments in accordance with U.S. generally accepted accountingprinciples and could differ from the Lipper reported return. Total returns for periods of less than oneyear are not annualized.

** For the six-month period ended June 30, 2017, average net assets were $1,251,291,000.(a) Calculated using average shares.(b) Reflects total annual operating expenses of the Fund before reductions of any expenses paid

indirectly. The Fund’s expenses paid indirectly decreased the expense ratios as follows: – – – – (.00%)† (.00%)†

† Represents less than 0.01% of average net assets.(c) Prior to May 1, 2013, the Manager had voluntarily agreed to limit the annual expenses of the Fund

Shares to 0.78% of the Fund Shares’ average net assets.(d) Annualized. The ratio is not necessarily indicative of 12 months of operations.

(10) FINANCIAL HIGHLIGHTS – R6 SHARESPer share operating performance for a share outstanding throughout theperiod is as follows: Period Ended June 30, 2017***

Net asset value at beginning of period $15.31 Income from investment operations:

Net investment income (.96)Net realized and unrealized gain 1.72

Total from investment operations .76 Less distributions from:

Net investment income – Net asset value at end of period $16.07 Total return (%)* 4.96

Net assets at end of period (000) $5,248

Ratios to average net assets:**Expenses (%)(a) .40Expenses, excluding reimbursements (%)(a) .81Net investment income (%)(a) .79

Portfolio turnover (%) 3

* Assumes reinvestment of all net investment income and realized capital gain distributions, if any,during the period. Includes adjustments in accordance with U.S. generally accepted accountingprinciples and could differ from the Lipper reported return. Total returns for periods of less than oneyear are not annualized.

** For the period ended June 30, 2017, average net assets were $5,174,000.*** R6 Shares commenced operations on March 1, 2017.(a) Annualized. The ratio is not necessarily indicative of 12 months of operations.



EXPENSE EXAMPLEJune 30, 2017 (unaudited)

EXAMPLEAs a shareholder of the Fund, you incur two types of costs: direct costs, suchas wire fees, redemption fees, and low balance fees; and indirect costs,including management fees, transfer agency fees, and other Fund operatingexpenses. This example is intended to help you understand your indirectcosts, also referred to as “ongoing costs” (in dollars), of investing in theFund and to compare these costs with the ongoing costs of investing in othermutual funds.

The example is based on an investment of $1,000 invested at the beginningof the period and held for the entire six-month period of January 1, 2017,through June 30, 2017, for Fund Shares and the period of March 1, 2017,through June 30, 2017, for R6 Shares.

ACTUAL EXPENSESThe line labeled “actual” in the table provides information about actualaccount values and actual expenses. You may use the information in this line,together with the amount you invested at the beginning of the period, toestimate the expenses that you paid over the period. Simply divide youraccount value by $1,000 (for example, an $8,600 account value divided by$1,000 = 8.6), then multiply the result by the number in the “actual” lineunder the heading “Expenses Paid During Period” to estimate the expensesyou paid on your account during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSESThe line labeled “hypothetical” under each share class in the table providesinformation about hypothetical account values and hypothetical expensesbased on the Fund’s actual expense ratios for each class and an assumed rateof return of 5% per year before expenses, which is not the Fund’s actual return.

Expense Example | 33

The hypothetical account values and expenses may not be used to estimate theactual ending account balance or expenses you paid for the period. You mayuse this information to compare the ongoing costs of investing in the Fundand other funds. To do so, compare this 5% hypothetical example with the 5%hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight yourongoing costs only and do not reflect any direct costs, such as wire fees,redemption fees, or low balance fees. Therefore, the line labeled “hypothetical”is useful in comparing ongoing costs only, and will not help you determine therelative total costs of owning different funds. In addition, if these direct costswere included, your costs would have been higher.

Expenses Paid Beginning Ending During Period* Account Value Account Value January 1, 2017 – January 1, 2017 June 30, 2017 June 30, 2017

Fund Shares Actual $1,000.00 $1,164.61 $2.79

Hypothetical (5% return before expenses) 1,000.00 1,022.22 2.61

R6 Shares** Actual 1,000.00 1,049.64 1.36

Hypothetical (5% return before expenses) 1,000.00 1,015.25 1.34

*Expenses are equal to the annualized expense ratio of 0.52% for Fund Shares and 0.40% for R6 Shares,which are net of any reimbursements and expenses paid indirectly, multiplied by the average accountvalue over the period, multiplied by 181 days/365 days for the Fund Shares (to reflect the one-half-yearperiod) or 121 days/365 days for the R6 Shares (to reflect the current period beginning with theR6 Shares’ inception date). The Fund’s actual ending account values are based on its actual total returnsof 16.46% for Fund Shares, for the six-month period of January 1, 2017, through June 30, 2017, and4.96% for R6 Shares, for the period of March 1, 2017, through June 30, 2017.

**R6 Shares commenced operations on March 1, 2017.


ADVISORY AGREEMENT(S)June 30, 2017 (unaudited)

At an in-person meeting of the Board of Trustees (the Board) held onApril 18, 2017, the Board, including the Trustees who are not “interestedpersons” (as that term is defined in the Investment Company Act of 1940, asamended) of the Trust (the Independent Trustees), approved for an annualperiod the continuance of the Advisory Agreement between the Trust andthe Manager with respect to the Fund and the Subadvisory Agreementbetween the Manager and Northern Trust Investments, Inc. (the Subadviser)with respect to the Fund.

In advance of the meeting, the Trustees received and considered a variety ofinformation relating to the Advisory Agreement and Subadvisory Agreementand the Manager and the Subadviser, and were given the opportunity to askquestions and request additional information from management. Theinformation provided to the Board included, among other things: (i) a separatereport prepared by an independent third party, which provided a statisticalanalysis comparing the Fund’s investment performance, expenses, and fees tocomparable investment companies; (ii) information concerning the servicesrendered to the Fund, as well as information regarding the Manager’s revenuesand costs of providing services to the Fund and compensation paid to affiliatesof the Manager; and (iii) information about the Manager’s and Subadviser’soperations and personnel. Prior to voting, the Independent Trustees reviewedthe proposed continuance of the Advisory Agreement and the SubadvisoryAgreement with management and with experienced counsel retained by theIndependent Trustees (Independent Counsel) and received materials from suchIndependent Counsel discussing the legal standards for their consideration ofthe proposed continuation of the Advisory Agreement and the SubadvisoryAgreement with respect to the Fund. The Independent Trustees also reviewedthe proposed continuation of the Advisory Agreement and the SubadvisoryAgreement with respect to the Fund in private sessions with IndependentCounsel at which no representatives of management were present.

Advisory Agreement(s) | 35

At each regularly scheduled meeting of the Board and its committees, theBoard receives and reviews, among other things, information concerning theFund’s performance and related services provided by the Manager and bythe Subadviser. At the meeting at which the renewal of the AdvisoryAgreement and Subadvisory Agreement is considered, particular focus isgiven to information concerning Fund performance, fees and total expensesas compared to comparable investment companies, and the Manager’sprofitability with respect to the Fund. However, the Board noted that theevaluation process with respect to the Manager and the Subadviser is anongoing one. In this regard, the Board’s and its committees’ considerationof the Advisory Agreement and Subadvisory Agreement included certaininformation previously received at such meetings.

ADVISORY AGREEMENTAfter full consideration of a variety of factors, the Board, including theIndependent Trustees, voted to approve the Advisory Agreement. In approvingthe Advisory Agreement, the Trustees did not identify any single factor ascontrolling, and each Trustee may have attributed different weights to variousfactors. Throughout their deliberations, the Independent Trustees wererepresented and assisted by Independent Counsel.

Nature, Extent, and Quality of Services – In considering the nature, extent,and quality of the services provided by the Manager under the AdvisoryAgreement, the Board reviewed information provided by the Managerrelating to its operations and personnel. The Board also took into account itsknowledge of the Manager’s management and the quality of the performanceof the Manager’s duties through Board meetings, discussions, and reportsduring the preceding year. The Board considered the fees paid to the Managerand the services provided to the Fund by the Manager under the AdvisoryAgreement, as well as other services provided by the Manager and its affiliatesunder other agreements, and the personnel who provide these services. Inaddition to the investment advisory services provided to the Fund, theManager and its affiliates provide administrative services, shareholderservices, oversight of Fund accounting, marketing services, assistance inmeeting legal and regulatory requirements, and other services necessary forthe operation of the Fund and the Trust.


The Board considered the Manager’s management style and the performanceof the Manager’s duties under the Advisory Agreement. The Board consideredthe level and depth of knowledge of the Manager, including the professionalexperience and qualifications of senior personnel, as well as current staffinglevels. The Board discussed the Manager’s effectiveness in monitoring theperformance of the Subadviser and its timeliness in responding to performanceissues. The allocation of the Fund’s brokerage, including the Manager’s processfor monitoring “best execution,” was also considered. The Manager’s role incoordinating the activities of the Fund’s other service providers also wasconsidered. The Board also considered the Manager’s risk managementprocesses. The Board considered the Manager’s financial condition and that ithad the financial wherewithal to continue to provide the same scope and highquality of services under the Advisory Agreement. In reviewing the AdvisoryAgreement, the Board focused on the experience, resources, and strengths ofthe Manager and its affiliates in managing the Fund, as well as the other fundsin the Trust.

The Board also reviewed the compliance and administrative servicesprovided to the Fund by the Manager, including the Manager’s oversightof the Fund’s day-to-day operations and oversight of Fund accounting.The Trustees, guided also by information obtained from their experiencesas trustees of the Trust, also focused on the quality of the Manager’scompliance and administrative staff.

Expenses and Performance – In connection with its consideration of theAdvisory Agreement, the Board evaluated the Fund’s advisory fees and totalexpense ratio as compared to other open-end investment companies deemed tobe comparable to the Fund as determined by the independent third party in itsreport. The Fund’s expenses were compared to (i) a group of investmentcompanies chosen by the independent third party to be comparable to the Fundbased upon certain factors, including fund type, comparability of investmentobjectives and classifications, sales load type (in this case, retail investmentcompanies with front-end loads and no sales loads), asset size, and expensecomponents (the “expense group”) and (ii) a larger group of investmentcompanies that includes all front-end and no-load retail open-end investmentcompanies with similar investment classifications/objectives as the Fundregardless of asset size, excluding outliers (the “expense universe”). Among


other data, the Board noted that the Fund’s management fee rate – whichincludes advisory and administrative services – was below the median of itsexpense group and its expense universe. The data indicated that the Fund’s totalexpenses were below the median of its expense group and its expense universe.The Board took into account the various services provided to the Fund by theManager and its affiliates, including the nature and high quality of the servicesprovided by the Manager. The Board also considered the level of correlationbetween the Nasdaq-100 Index and the Fund and the relatively low trackingerror between the Fund and the index and noted that it reviews such informationon a quarterly basis. The Board also noted the level and method of computingthe management fee. The Trustees also took into account that the subadvisoryfees under the Subadvisory Agreement are paid by the Manager. The Boardalso considered and discussed information about the Subadviser’s fees,including the amount of management fees retained by the Manager afterpayment of the subadvisory fee.

In considering the Fund’s performance, the Board noted that it reviews at itsregularly scheduled meetings information about the Fund’s performanceresults. The Trustees also reviewed various comparative data provided tothem in connection with their consideration of the renewal of the AdvisoryAgreement, including, among other information, a comparison of theFund’s average annual total return with its Lipper index and with that ofother mutual funds deemed to be in its peer group by the independent thirdparty in its report (the “performance universe”). The Fund’s performanceuniverse consisted of the Fund and all retail and institutional open-endinvestment companies with similar classifications/objectives as the Fundregardless of asset size or primary channel of distribution. This comparisonindicated that, among other data, the Fund’s performance was above theaverage of its performance universe and its Lipper index for the one-, three-,five-, and ten-year periods ended December 31, 2016. The Board also notedthat the Fund’s percentile performance ranking was in the top 10% of itsperformance universe for the one-year period ended December 31, 2016 andwas in the top 1% of its performance universe for the three-, five-, and ten-year periods ended December 31, 2016.

Compensation and Profitability – The Board took into consideration the leveland method of computing the management fee. The information considered


by the Board included operating profit margin information for the Manager’sbusiness as a whole. The Board also received and considered profitabilityinformation related to the management revenues from the Fund. Thisinformation included a review of the methodology used in the allocation ofcertain costs to the Fund. In considering the profitability data with respect tothe Fund, the Trustees noted that the Manager pays the Fund’s subadvisoryfees. The Trustees reviewed the profitability of the Manager’s relationshipwith the Fund before tax expenses. In reviewing the overall profitability ofthe management fee to the Manager, the Board also considered the fact thataffiliates provide shareholder servicing and administrative services to theFund for which they receive compensation. The Board also considered thepossible direct and indirect benefits to the Manager from its relationshipwith the Trust, including that the Manager may derive reputational and otherbenefits from its association with the Fund. The Trustees recognized that theManager should be able to earn a reasonable level of profits in exchange forthe level of services it provides to the Fund and the entrepreneurial risk thatit assumes as Manager.

Economies of Scale – The Board considered whether there should be changesin the management fee rate or structure in order to enable the Fund toparticipate in any economies of scale. The Board took into accountmanagement’s discussion of the Fund’s current advisory fee structure. TheBoard also noted that if the Fund’s assets increase over time, the Fund mayrealize other economies of scale if assets increase proportionally more thansome expenses. The Board also considered the fact that the Manager pays theFund’s subadvisory fees. The Board determined that the current investmentmanagement fee structure was reasonable.

Conclusions – The Board reached the following conclusions regarding theFund’s Advisory Agreement with the Manager, among others: (i) theManager has demonstrated that it possesses the capability and resources toperform the duties required of it under the Advisory Agreement; (ii) theManager maintains an appropriate compliance program; (iii) the performanceof the Fund is reasonable in relation to the performance of funds with similarinvestment objectives and to relevant indices; (iv) the Fund’s advisoryexpenses are reasonable in relation to those of similar funds and to theservices to be provided by the Manager; and (v) the Manager’s and its


affiliates’ level of profitability from its relationship with the Fund, if any, isreasonable in light of the nature and high quality of services provided bythe Manager and the type of fund. Based on its conclusions, the Boarddetermined that continuation of the Advisory Agreement would be in the bestinterests of the Fund and its shareholders.

SUBADVISORY AGREEMENT In approving the Fund’s Subadvisory Agreement, the Board consideredvarious factors, among them: (i) the nature, extent, and quality of servicesprovided to the Fund, including the personnel providing services; (ii) theSubadviser’s compensation and any other benefits derived from thesubadvisory relationship; (iii) comparisons, to the extent applicable, ofsubadvisory fees and performance to comparable investment companies; and(iv) the terms of the Subadvisory Agreement. The Board’s analysis of thesefactors is set forth below. After full consideration of a variety of factors, theBoard, including the Independent Trustees, voted to approve the SubadvisoryAgreement. In approving the Subadvisory Agreement, the Trustees did notidentify any single factor as controlling, and each Trustee may have attributeddifferent weights to various factors. Throughout their deliberations, theIndependent Trustees were represented and assisted by Independent Counsel.

Nature, Extent, and Quality of Services Provided; Investment Personnel – TheTrustees considered information provided to them regarding the servicesprovided by the Subadviser, including information presented periodicallythroughout the previous year. The Board considered the Subadviser’s level ofknowledge and investment style. The Board reviewed the experience andcredentials of the investment personnel who are responsible for managing theinvestment of portfolio securities with respect to the Fund and the Subadviser’slevel of staffing. The Trustees considered, based on the materials provided tothem by the Subadviser, whether the method of compensating portfoliomanagers is reasonable and includes mechanisms to prevent a manager withunderperformance from taking undue risks. The Trustees also noted theSubadviser’s brokerage practices. The Board also considered the Subadviser’sregulatory and compliance history. The Board also took into account theSubadviser’s risk management processes. The Board noted that the Manager’smonitoring processes of the Subadviser include: (i) regular telephonic meetings


to discuss, among other matters, investment strategies and to review portfolioperformance; (ii) monthly portfolio compliance checklists and quarterlycompliance certifications to the Board; and (iii) due diligence visits to theSubadviser.

Subadviser Compensation – The Board also took into consideration thefinancial condition of the Subadviser. In considering the cost of services tobe provided by the Subadviser and the profitability to the Subadviser of itsrelationship with the Fund, the Trustees noted that the fees under theSubadvisory Agreement were paid by the Manager. The Trustees also reliedon the ability of the Manager to negotiate the Subadvisory Agreement andthe fees thereunder at arm’s length. For the above reasons, the Boarddetermined that the profitability of the Subadviser from its relationship withthe Fund was not a material factor in its deliberations with respect to theconsideration of the approval of the Subadvisory Agreement. For similarreasons, the Board concluded that the potential for economies of scale in theSubadviser’s management of the Fund was not a material factor inconsidering the Subadvisory Agreement, although the Board noted that theSubadvisory Agreement contains breakpoints in its fee schedule.

Subadvisory Fees and Fund Performance – The Board compared thesubadvisory fees for the Fund with the fees that the Subadviser charges tocomparable clients, as applicable. The Board considered that the Fund paysa management fee to the Manager and that, in turn, the Manager pays asubadvisory fee to the Subadviser. As noted above, the Board considered,among other data, the Fund’s performance during the one-, three-, five-,and ten-year periods ended December 31, 2016, as compared to the Fund’srespective peer group and noted that the Board reviews at its regularlyscheduled meetings information about the Fund’s performance results. TheBoard noted the Manager’s experience and resources in monitoring theperformance, investment style, and risk-adjusted performance of theSubadviser.

Conclusions – The Board reached the following conclusions regarding theSubadvisory Agreement, among others: (i) the Subadviser is qualified tomanage the Fund’s assets in accordance with its investment objectives andpolicies; (ii) the Subadviser maintains an appropriate compliance program;


(iii) the performance of the Fund is reasonable in relation to the performanceof funds with similar investment objectives and to relevant indices; and(iv) the Fund’s advisory expenses are reasonable in relation to those of similarfunds and to the services to be provided by the Manager and the Subadviser.Based on its conclusions, the Board determined that approval of theSubadvisory Agreement with respect to the Fund would be in the bestinterests of the Fund and its shareholders.

Trustees Daniel S. McNamaraRobert L. Mason, Ph.D.Jefferson C. BoyceDawn M. HawleyPaul L. McNamaraRichard Y. Newton IIIBarbara B. Ostdiek, Ph.D. Michael F. Reimherr

Administrator and USAA Asset Management CompanyInvestment Adviser P.O. Box 659453

San Antonio, Texas 78265-9825

Underwriter and USAA Investment Management CompanyDistributor P.O. Box 659453

San Antonio, Texas 78265-9825

Transfer Agent USAA Shareholder Account Services9800 Fredericksburg RoadSan Antonio, Texas 78288

Custodian and State Street Bank and Trust CompanyAccounting Agent P.O. Box 1713

Boston, Massachusetts 02105

Independent Ernst & Young LLPRegistered Public 100 West Houston St., Suite 1700Accounting Firm San Antonio, Texas 78205

Mutual Fund Under “My Accounts” onSelf-Service 24/7 usaa.com select your mutual fundat usaa.com account and either click the link orOr call select ‘I want to...’ and select(800) 531-USAA (8722) the desired action.(210) 531-8722

Copies of the Manager’s proxy voting policies and procedures, approved by the Trust’s Board ofTrustees for use in voting proxies on behalf of the Fund, are available without charge (i) by calling(800) 531-USAA (8722) or (210) 531-8722; (ii) at usaa.com; and (iii) in summary within theStatement of Additional Information on the SEC’s website at http://www.sec.gov. Informationregarding how the Fund voted proxies relating to portfolio securities during the most recent 12-monthperiod ended June 30 is available without charge (i) at usaa.com; and (ii) on the SEC’s website athttp://www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and thirdquarters of each fiscal year on Form N-Q. These Forms N-Q are available at no charge (i) by calling(800) 531-USAA (8722) or (210) 531-8722; (ii) at usaa.com; and (iii) on the SEC’s website athttp://www.sec.gov. These Forms N-Q also may be reviewed and copied at the SEC’s PublicRef erence Room in Washington, D.C. Information on the operation of the Public Ref erence Roommay be obtained by calling (800) 732-0330.

37758-0817 ©2017, USAA. All rights reserved.

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SEMIANNUAL REPORT - USAA REPORT ... 45,497 Alexion Pharmaceuticals, Inc.* $ 5,536 ... 2,397,512 Goldman Sachs Financial Square Government Fund Institutional Class,